In the 21st Century, the business developed quite well. With the advanced technology and the internet era, businesses boomed and the functions and operations of business changed drastically. But, as we move forward with technology and business, one thing which lies between them is the trade secrets. Trade Secrets is basically the secret information about the business like for example new business model strategies, new product designs, methods etc. We can take the example of Mirinda which has its own formula for preparing its cold drink. One of the most important points about Trade Secrets is that it doesn’t require any registration. The reason is that there are no procedures are involved that the company has to abide by. Other Essential points are as below-
- The companies can protect their trade secrets for an infinite amount of time since there is no limit given
- Companies need to make sure that the crucial information shall not be out to the public. It is to be ensured that the crucial information must be kept in a secured way so that no external force can access it easily.
- The crucial information which is to be hided from others should be having some strong value.
- Strong and correct steps need to be taken by the Owners of the company to protect the confidential information.
Trade Secrets can be also viewed as intellectual property of the company. Under the Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), it states that information that is not made public by the company due to secrecy also comes under the Intellectual Property of the Company. It also stated that information that is not accessible, has a big value and big steps taken for its protection should be given protection. India also has been accepting the IPR policy since 2016. The policy has mainly 7 objectives as well as required steps to be taken by the concerned ministries or departments. Ensuring a strong legal framework is one of the prime objectives of the National IPR Policy. Trade Policy Forum between the United States and India which was held in 2016 discussed the challenges of trade secrets and IPR legislation regarding trade secrets.
Other than the IPR Legislations in India, we also have relevant sections of the Indian Contract Act which deal with trade secret rights. One of the sections is Section 27 of the ICA which deals with nulling all the agreements which pose restrictions to trade. It covers the security of the restraint of trade and after 1958, the concept of fair restraint was added on the recommendations of the Law Commission of India. Other than the Indian Contracts Act, we also have the Special Reliefs Act, 1877 where remedies are given if there is a breach of trade secrets.
But as said earlier, threats are not only external. On the Insider level also, the company has a threat of leakage of confidential information through employees. It is very difficult to check up on the employee’s loyalty towards the company. That is why Threat Perception is always high on Insider Level with regard to leakage of Trade Secrets. That’s why nowadays companies used the concept of need-to-know. In this, certain access is being provided to those people in the company only who are loyal and can be trusted completely. Normally, employees in the Higher Management are given access to information which is crucial. We can take the example of any software development company wherein every new software made, only some people in the company are given the crucial information so that no loss is incurred.
Lastly, even though the concept of trade secrets and their protection are covered under various legislations like Contracts Act, Competition Act etc. still a new law is needed to cover the loopholes. India, being a rapidly growing country need to make stronger and more effective laws for the protection of trade secrets. Due to the TRIPS Agreement on IPR, many of the member nations have updated their legislation according to the situation. It is high time India needs to bring laws for the protection of trade secrets otherwise it will be very difficult for the country to become the Global Market Leader.